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.

SUNDART INTERNATIONAL HOLDINGS LIMITED 承達國際控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2288)

CONNECTED AND DISCLOSEABLE TRANSACTION

ACQUISITION OF FURTHER INTERESTS IN KAILONG REI PROJECT INVESTMENT CONSULTING (HONG KONG) CO., LIMITED

ACQUISITION OF FURTHER INTERESTS IN KLR HONG KONG

On 11 July 2012, Talent Step, an indirect wholly-owned subsidiary of the Company, entered into:

(i) the conditional Restructuring Agreement with Good Grace, Borrison and KLR Holdings in respect of the KLR Holdings Restructuring and the KLR Hong Kong Restructuring;
(ii) the conditional Subscription Agreement with the Other Subscribers and KLR Hong Kong in relation to the KLR Hong Kong Subscription; and
(iii) the Shareholders’ Deed with the Other KLR Hong Kong Shareholders and KLR Hong Kong in respect of the matters relating to, among others, the management of KLR Hong Kong.

Following the completion of the Transactions, the Company’s indirect interest in the issued share capital of KLR Hong Kong will increase from representing approximately 21.38% to approximately 41.07%. Pursuant to the Shareholders’ Deed, the Company is able to exercise control over the board of directors of KLR Hong Kong, which is responsible for making major decisions relating to the financing and operations of KLR Hong Kong. Accordingly, KLR Hong Kong will be accounted for as a subsidiary of the Company after signing of the Shareholders’ Deed.

LISTING RULES IMPLICATIONS

Since Borrison, a substantial shareholder of KLR Holdings, is an associate of Mr. Ivan Ho who is a director of Wit Legend Investments Limited, a subsidiary of the Company, the entering into the Restructuring Agreement constitutes a connected transaction of the Company pursuant to Rule 14A.13(1)(b)(i) of the Listing Rules. Pursuant to Rules 14.22 and 14A.25 of the Listing Rules, the advance of the Talent Step Loan and the Additional Talent Step Loan, the KLR Holdings Restructuring, the KLR Hong Kong Restructuring and the KLR Hong Kong Subscription will be aggregated and treated as if they were one transaction. As one or more of the applicable percentage ratios in respect of the aggregate amount of the Talent Step Loan, the Additional Talent Step Loan and the consideration payable by Talent Step pursuant to the KLR Holdings Restructuring, the KLR Hong Kong Restructuring and the KLR Hong Kong Subscription exceed 5% but all the applicable percentage ratios are below 25%, the entering into of the Restructuring Agreement also constitutes, and the entering into of the Subscription Agreement constitutes, discloseable transactions for the Company. As the Company considers that the Subscription Agreement and the Restructuring Agreement are part of the Company’s plan to acquire further interests in KLR Hong Kong, thus the Subscription Agreement is related to the Restructuring Agreement. Accordingly, both the Restructuring Agreement and the Subscription Agreement are subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules as well as the Independent Shareholders’ approval requirement under Chapter 14A of the Listing Rules.

WRITTEN APPROVAL

Pursuant to Rule 14A.43 of the Listing Rules, written Independent Shareholders’ approval may be accepted in lieu of holding a general meeting if (i) no Shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the Restructuring Agreement, the Subscription Agreement and the transactions contemplated thereunder; and (ii) written approval has been obtained from a Shareholder or a closely allied group of Shareholders who together hold more than 50% in nominal value of the issued share capital of the Company giving the right to attend and vote at general meetings to approve the Restructuring Agreement, the Subscription Agreement and the transactions contemplated thereunder.

So far as the Company is aware, none of the Shareholders is materially interested in the Restructuring Agreement, the Subscription Agreement and the transactions contemplated thereunder. As such, no Shareholder is required to abstain from voting if general meeting were to be convened to approve the Restructuring Agreement, the Subscription Agreement and the transactions contemplated thereunder. As at the date of this announcement, Mr. Chan (through Tiger Crown) and Mr. Li and Ms. Li (through Scenemay Holdings) are regarded as a group of controlling shareholders acting in concert to exercise their voting rights in the Company, pursuant to the provisions of the SFO, each of them is deemed to be interested in the 194,208,000 Shares beneficially or deemed to be owned by each other. Tiger Crown, Scenemay Holdings, Mr. Chan, Mr. Li and Ms. Li together are therefore interested in a total of approximately 40.46% of the issued share capital of the Company. Mr. Ng (an existing executive Director), Mr. Leung and Mr. Wong (who were previously Directors) are interested in 84,000,000 Shares, 34,272,000 Shares and 20,520,000 Shares respectively. None of Mr. Chan, Tiger Crown, Mr. Li, Ms. Li, Mr. Leung, Mr. Ng and Mr. Wong have any material interest in the Restructuring Agreement and the transactions contemplated thereunder other than through their interest in the Shares. The Company has obtained the Written Approval from Tiger Crown, Scenemay Holdings, Mr. Leung, Mr. Ng and Mr. Wong, being a closely allied group of the Shareholders who collectively hold an aggregate of 333,000,000 Shares (representing approximately 69.75% of the issued share capital of the Company) as at the date of this announcement. Accordingly, pursuant to Rules 14A.43 and 14A.53 of the Listing Rules, the Company has applied for, and the Stock Exchange has granted, a waiver from the requirement to hold a general meeting and the permission for the Independent Shareholders’ approval in respect of the Restructuring Agreement, the Subscription Agreement and the transactions contemplated thereunder be given in the form of the Written Approval.

A circular containing, inter alia, (i) further information in respect of the Restructuring Agreement, the Subscription Agreement and the transactions contemplated thereunder; (ii) the recommendation of the Independent Board Committee to the Independent Shareholders with respect to the Restructuring Agreement and the Subscription Agreement; and (iii) the advice from the independent financial adviser to the Independent Board Committee and the Independent Shareholders with respect to the Restructuring Agreement and the Subscription Agreement, is expected to be despatched to the Shareholders by 31 August 2012 as time is required for the independent financial adviser to prepare its advice to the Independent Shareholders.

INTRODUCTION

The Company had in 2010 first acquired approximately 15.86% interest in the KLR Group. As mentioned in the announcement of the Company dated 16 May 2012 and the circular of the Company dated 1 June 2012, there was a plan to further increase the Company’s stake in KLR Holdings to the extent that KLR Holdings or KLR Hong Kong may become a subsidiary of the Company. The Company is pleased to announce that on 11 July 2012, Talent Step entered into a series of transactions as detailed below with view to acquire further interests in KLR Group and to consolidate KLR Hong Kong into the accounts of the Company.

THE RESTRUCTURING AGREEMENT

Date

11 July 2012

Parties

Talent Step
Good Grace
Borrison
KLR Holdings

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, save for the Company’s indirect interest in KLR Holdings (being approximately 29.36% at the time of signing of the Restructuring Agreement), each of Good Grace and KLR Holdings and their respective ultimate beneficial owner (other than Mr. Ivan Ho or Borrison) are third parties independent of and do not have any other relationship with the Group and its connected persons. Since Mr. Ivan Ho is a director of Wit Legend Investments Limited, a subsidiary of the Company, and Borrison is owned as to 50% by each of him and his brother, Borrison is an associate of Mr. Ivan Ho and thus a connected person of the Company.

Background

Prior to the signing of the Restructuring Agreement, KLR Holdings entered into a sale and purchase agreement dated 12 April 2012 with various sellers, pursuant to which KLR Holdings had purchased a total of 121,884 KLR Hong Kong Shares (representing approximately 18.81% of the issued share capital of KLR Hong Kong) from various sellers at an aggregate cash consideration of US$1,636,000 (the “ KLR Hong Kong Acquisition ”). To finance the payment of such cash consideration, each of Talent Step, Good Grace and Borrison, being all the shareholders of KLR Holdings, has agreed to advance interestfree shareholders’ loans in the amount of US$480,000 (the “ Talent Step Loan ”), US$947,000 (the “ Good Grace Loan ”) and US$209,000 (the “ Borrison Loan ”) respectively to KLR Holdings.

Following the KLR Hong Kong Acquisition and immediately prior to the signing of the Restructuring Agreement, KLR Hong Kong is owned as to approximately 72.83% by KLR Holdings.

On 10 April 2012, Talent Step has, in addition to advancing the Talent Step Loan to KLR Holdings, advanced further loans equivalent to the aggregate of the Good Grace Loan and the Borrison Loan (the “ Additional Talent Step Loan ”) to KLR Holdings pending the advance of the Good Grace Loan and the Borrison Loan to KLR Holdings by Good Grace and Borrison as mentioned above. As a result, immediately prior to the signing of the Restructuring Agreement, KLR Holdings was indebted to Talent Step in the aggregate amount of US$1,636,000, which is interest-free and has no fixed repayment term.

KLR Holdings Restructuring

Conditional upon the satisfaction of the condition as described in the section headed “Condition to completion of the Restructuring Agreement” below, the parties thereto shall take all such actions within their powers to cause all of the following transactions to be completed or effected on or before 31 July 2012 (the “ KLR Holdings Restructuring Completion ”):

(a) (i) Talent Step shall purchase, and Good Grace shall sell and assign, 2,283 KLR Holdings Shares (representing approximately 22.83% of the issued share capital of KLR Holdings) to Talent Step and a portion of the Good Grace Loan in the amount of US$374,000 (the “ Sale Good Grace Loan ”), at an aggregate cash consideration of US$3,149,000 (of which, the consideration for the Sale Good Grace Loan is US$374,000 and the consideration for the 2,283 KLR Holdings Shares is US$2,775,000);
(ii) Good Grace shall refinance KLR Holdings with an amount equivalent to the Good Grace Loan. Upon Good Grace having so refinanced KLR Holdings, KLR Holdings shall repay an amount equivalent to the Good Grace Loan to Talent Step as partial settlement of the Additional Talent Step Loan;
(b) (i) Good Grace shall purchase, and Borrison shall sell and assign, 335 KLR Holdings Shares (representing approximately 3.35% of the issued share capital of KLR Holdings) to Good Grace and a portion of the Borrison Loan in the amount of US$55,000 (the “ Sale Borrison Loan ”) to Good Grace at an aggregate cash consideration of US$212,000 (of which, the consideration for the Sale Borrison Loan is US$55,000 and the consideration for the 335 KLR Holdings Shares is US$157,000);
(ii) Borrison shall refinance KLR Holdings with an amount equivalent to the Borrison Loan. Upon Borrison having so refinanced KLR Holdings, KLR Holdings shall repay an amount equivalent to the Borrison Loan to Talent Step as partial settlement of the Additional Talent Step Loan;

Prior to the KLR Holdings Restructuring, KLR Holdings was owned as to approximately 29.36% by Talent Step, approximately 57.87% by Good Grace and approximately 12.77% by Borrison. Following the KLR Holdings Restructuring Completion, KLR Holdings will be owned as to approximately 52.19% by Talent Step, approximately 38.39% by Good Grace and approximately 9.42% by Borrison and the Additional Talent Step Loan will be fully repaid to Talent Step. KLR Holdings will not be accounted for as a subsidiary of the Company.

KLR Hong Kong Restructuring

Following the KLR Holdings Restructuring Completion, the parties thereto shall take all such actions within their powers to cause all of the following transactions to be completed as soon as possible and in any event on or before 31 July 2012 (the “ KLR Hong Kong Restructuring Completion ”):

(a) KLR Holdings shall assign and distribute 246,288 KLR Hong Kong Shares (representing approximately 38.01% of the issued share capital of KLR Hong Kong) to Talent Step and in consideration thereof, Talent Step shall waive and discharge the whole of the outstanding amount owing by KLR Holdings to Talent Step in the amount of US$854,000 (being the aggregate of the Talent Step Loan plus the Sale Good Grace Loan);
(b) KLR Holdings shall assign and distribute 181,192 KLR Hong Kong Shares (representing approximately 27.96% of the issued share capital of KLR Hong Kong) to Good Grace and in consideration thereof, Good Grace shall waive and discharge the whole of the outstanding amount owing by KLR Holdings to Good Grace in the amount of US$628,000 (being the aggregate of the Good Grace Loan less the Sale Good Grace Loan plus the Sale Borrison Loan); and
(c) KLR Holdings shall assign and distribute 44,454 KLR Hong Kong Shares (representing approximately 6.86% of the issued share capital of KLR Hong Kong) to Borrison and in consideration thereof, Borrison shall waive and discharge the whole of the outstanding amount owing by KLR Holdings to Borrison in the amount of US$154,000 (being the aggregate of the Borrison Loan less the Sale Borrison Loan).

Condition to completion of the Restructuring Agreement

Each of the KLR Holdings Restructuring Completion and the KLR Hong Kong Restructuring Completion is conditional upon the approval of the Restructuring Agreement and the transactions contemplated thereunder by the Independent Shareholders in accordance with the relevant requirements of the Listing Rules.

As at the date of this announcement, the condition set out above has been satisfied.

Consideration

In relation to the KLR Holdings Restructuring, Talent Step shall pay US$3,149,000 in cash to Good Grace at the KLR Holdings Restructuring Completion, which was determined with reference to the net asset value of KLR Group as at 30 April 2012.

In relation to the KLR Hong Kong Restructuring, since Talent Step shall waive and discharge the whole of the outstanding amount owing by KLR Holdings to Talent Step in the amount of US$854,000, the effective consideration for the acquisition of 246,228 KLR Hong Kong Shares is US$854,000, which was determined with reference to the total assets value, the reserves and the shareholders’ loans of single company accounts of KLR Holdings as at 30 April 2012.

After the distribution by KLR Holdings of the total of 471,934 KLR Hong Kong Shares, being its entire shareholding in KLR Hong Kong, to its shareholders pursuant to the KLR Hong Kong Restructuring, KLR Holdings cease to have any interest in KLR Hong Kong.

THE SUBSCRIPTION AGREEMENT

Date

11 July 2012

Parties

Talent Step
the Other Subscribers
KLR Hong Kong

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, save for the Company’s indirect interest in KLR Hong Kong (being approximately 21.38% at the time of signing of the Subscription Agreement), each of KLR Hong Kong and the Other Subscribers (other than Mr. Ivan Ho, Borrison, SCIM and PAG) and their respective ultimate beneficial owner (where applicable, other than Mr. Ivan Ho, Borrison, SCIM and PAG) are third parties independent of and do not have any other relationship with the Group and its connected persons. Since Mr. Ivan Ho holds 5% interests in and is a director of Wit Legend Investments Limited, a subsidiary of the Company, and Borrison is owned as to 50% by Mr. Ivan Ho, each of Mr. Ivan Ho and Borrison is a connected person of the Company. SCJREP IV Cayman E, Ltd. is a substantial shareholder of Wit Legend Investments Limited (a subsidiary of the Company). As SCIM is a general partner of SCJREP IV Caymen E, Ltd. and a wholly owned subsidiary of PAG, each of SCIM and PAG is regarded as an associate of SCJREP IV Cayman E, Ltd. and thus a connected person of the Company.

Subscription of KLR Hong Kong Shares

Subject to the terms and conditions of the Subscription Agreement, each of the Subscribers agreed to subscribe and pay for KLR Hong Kong Shares at the subscription price of US$17.32 per KLR Hong Kong Share in the following manner:

	Number of KLR
Name of Subscriber	Hong Kong Shares	Subscription amount
Talent Step	304,333	US$5,271,000
Good Grace	223,895	US$3,878,000
Borrison	54,931	US$951,000
Mr. Cheng Hei Ming	74,917	US$1,298,000
Mr. Ivan Ho	10,386	US$180,000
Mr. Stephen Anthony Roth	4,019	US$70,000
PAG	20,346	US$352,000

Consideration

The consideration payable by Talent Step under the Subscription Agreement is US$5,271,000 (the “ Subscription Amount ”), which shall be paid by Talent Step to KLR Hong Kong in cash. The Subscription Amount was determined with reference to the net asset value of KLR Group as at 30 April 2012 and the capital requirements of KLR Hong Kong.

All of the Subscribers shall pay their respective subscription amount on the date falling 7 days after the signing of the Subscription Agreement, or such other date as the parties thereto agree in writing (the “ Subscription Agreement Completion Date ”) or within 7 days before the Subscription Agreement Completion Date.

Completion

The subscription, allotment and issue of KLR Hong Kong Shares pursuant to the Subscription Agreement is conditional upon the approval of the Subscription Agreement and the transactions contemplated thereunder by the Independent Shareholders in accordance with the relevant requirements of the Listing Rules. Upon satisfaction of the aforesaid condition and the payment by a Subscriber of its corresponding subscription amount in accordance with the Subscription Agreement, KLR Hong Kong shall allot and issue to such Subscriber the relevant number of fully paid KLR Hong Kong Shares at an issue price of US$17.32 per KLR Hong Kong Share.

As at the date of this announcement, the condition set out above has been satisfied.

The completion of the Restructuring Agreement and the completion of the Subscription Agreement are not inter-conditional upon each other.

THE SHAREHOLDERS’ DEED

Date

11 July 2012

Parties

Talent Step
the Other KLR Hong Kong Shareholders
KLR Hong Kong

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, save for the Company’s indirect interest in KLR Hong Kong (being approximately 21.38% at the time of signing of the Shareholders’ Deed), each of KLR Hong Kong and the Other KLR Hong Kong Shareholders (other than Mr. Ivan Ho, Borrison, SCIM and PAG) and their respective ultimate beneficial owner (where applicable, other than Mr. Ivan Ho, Borrison, SCIM and PAG) are third parties independent of and do not have any other relationship with the Group and its connected persons. Since Mr. Ivan Ho is a director of Wit Legend Investments Limited, a subsidiary of the Company, and Borrison is owned as to 50% by Mr. Ivan Ho, each of Mr. Ivan Ho and Borrison is a connected person of the Company. SCJREP IV Caymen E, Ltd. (a company controlled by SCIM) is a substantial shareholder of Wit Legend Investments Limited (a subsidiary of the Company). As SCIM is a general partner of SCJREP IV Caymen E, Ltd. and a wholly owned subsidiary of PAG, each of SCIM and PAG is regarded as an associate of SCJREP IV Cayman E, Ltd. and thus a connected person of the Company.

The KLR Hong Kong Shareholders and KLR Hong Kong have entered into the Shareholders’ Deed to provide for the ownership, management, financing and other activities of KLR Hong Kong. The principal terms of the Shareholders’ Deed, among other things, are summarised as follows:

Effectiveness

The Shareholders’ Deed shall become effective upon the approval of the Shareholders’ Deed and the transactions contemplated thereunder by the Independent Shareholders in accordance with the relevant requirements of the Listing Rules.

As at the date of this announcement, the approval set out above has been obtained and thus the Shareholders’ Deed has become effective.

Board Representation

The board of directors of KLR Hong Kong shall consist of a maximum of 7 directors, of which Talent Step has the right to appoint and remove up to 4 directors. The chairman of the board of directors of KLR Hong Kong shall be a director designated by Talent Step and the quorum for board meetings of KLR Hong Kong shall be 4 of which at least 2 shall be directors nominated by Talent Step.

All matters relating to the management and operation of KLR Hong Kong shall be decided by the board of directors of KLR Hong Kong. Questions at meetings of the board of directors of KLR Hong Kong shall be decided by a simple majority vote. The board of directors of KLR Hong Kong shall not do certain matters specified in the Shareholders’ Deed unless with the prior approval of Talent Step, Good Grace, Borrison, Mr. Stephen Anthony Roth and SCIM.

Finance for KLR Hong Kong

The capital and cash requirements of KLR Hong Kong shall be satisfied by utilisation of the proceeds of the amounts received by KLR Hong Kong from the Subscribers pursuant to the Subscription Agreement.

KLR Hong Kong may, directly or indirectly through affiliates in which it has an interest, among others, obtain financing or create security on such terms as the board of directors of KLR Hong Kong considers appropriate. The shareholders of KLR Hong Kong shall not be under any obligation to guarantee any borrowing or other debts or obligations of KLR Hong Kong.

Dividend Policy

Subject to applicable law, the appropriation of prudent and proper reserves, the retention out of profits of funds to meet any investment or other capital expenditure requirements and requirements as to solvency or otherwise applicable to KLR Hong Kong as determined by its board of directors in its sole discretion, KLR Hong Kong shall distribute by way of dividend to the shareholders of KLR Hong Kong 70% of its distributable profits in respect of each financial year ending 31 December.

Further issue of KLR Hong Kong Shares

Any new shares created in the capital of KLR Hong Kong shall before issuance be offered for subscription in the first instance to the shareholders of KLR Hong Kong in proportion as nearly as practicable to their respective shareholding in KLR Hong Kong.

Pre-emption rights

Each time where a shareholder of KLR Hong Kong wishes to transfer all or part of its KLR Hong Kong Shares to any third party who has made a bona fide offer therefor, the selling shareholder shall first offer the KLR Hong Kong Shares desired to be transferred to all the other shareholders of KLR Hong Kong at the same price and on the same terms as those offered by the third party purchaser in accordance with the provisions of the Shareholders’ Deed.

Drag-along rights

In the event that Talent Step and Good Grace (the “ Majority Shareholders ”) wishes to transfer all of their KLR Hong Kong Shares to a third party purchaser (the “ Drag-Along Purchaser ”), the Majority Shareholders shall be entitled, by notice in writing, to all shareholders of KLR Hong Kong other than the Majority Shareholders (the “ Drag-Along Shareholders ”), to require the Drag-Along Shareholders to sell to the Drag-Along Purchaser all (but not less than all) of the KLR Hong Kong Shares held by the DragAlong Shareholders at the same price and on the same terms and conditions as those applicable to the sale by the Majority Shareholders of their KLR Hong Kong Shares to the Drag-Along Purchaser.

INFORMATION ON KLR HOLDINGS AND KLR HONG KONG

General

KLR Holdings is an investment holding company incorporated in the British Virgin Islands which principal business prior to the KLR Hong Kong Restructuring Completion was the holding of interest in KLR Hong Kong, which description is set out in the paragraph below. After the distribution by KLR Holdings of the total of 471,934 KLR Hong Kong Shares, being its entire shareholding in KLR Hong Kong, to its shareholders pursuant to the KLR Hong Kong Restructuring, KLR Holdings will cease to have any interest in KLR Hong Kong.

KLR Hong Kong is a company incorporated in Hong Kong with limited liability. KLR Hong Kong, through its subsidiaries and/or affiliates, carries out real estate investment and asset management businesses in the Greater China Region. KLR Group was founded in 2004 by Mr. Stephen Anthony Roth and Mr. Cheng Hei Ming. KLR Group’s principals and institutional shareholders have extensive experience in the United States institutional real estate capital markets. Their expertise also includes a comprehensive understanding of and familiarity with Japanese, Western European, China and other international markets.

KLR Group pursues opportunity to invest in real estate projects such as existing stabilised real estate projects that are generating positive cash flow, completed real estate assets that have not yet achieved full occupancy and co-investment in real estate development projects with reputable local or international

developers. KLR Group’s investment focus lies in major markets such as Shanghai, Beijing, Guangzhou, Shenzhen, Hangzhou, Tianjin, Chongqing, Chengdu, Wuhan, Nanjing, Dalian, Qingdao, Kunming and other major second-tier cities.

Simplified corporate structure

Set out below are the simplified corporate structures of KLR Hong Kong immediately prior to and immediately after completion of the Transactions:

(i) Immediately prior to the completion of the Transactions

==> picture [376 x 174] intentionally omitted <==

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

The Company Mr. Cheng Hei Ming Mr. Ivan Ho
100% 100% 50%
Talent Step Good Grace Borrison
29.36% 57.87% 12.77%
PAG Real Estate Others
KLR Holdings SCIM
Limited (Note 1)
1.86% 72.83% 5.36% 19.95%
KLR Hong Kong
----- End of picture text -----

Note 1: Others includes Mr. Stephen Anthony Roth (8.15%), Mr. Cheng Hei Ming (9.36%), Mr. Geng Hao (0.93%) and Ms. Woo Wai Yu (1.51%)

(ii) Immediately after the completion of the Transactions

==> picture [390 x 123] intentionally omitted <==

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

The Company Mr. Cheng Mr. Ivan Ho
Hei Ming
100% 100% 50%
PAG Real Others
SCIM Talent Step Good Grace Borrison
Estate Limited (Note 2)
2.42% 2.59% 41.07% 30.21% 7.41% 16.30%
KLR Hong Kong
----- End of picture text -----

Note 2: Others includes Mr. Stephen Anthony Roth (4.24%), Mr. Cheng Hei Ming (10.11%), Mr. Geng Hao (0.45%), Ms. Woo Wai Yu (0.73%) and Mr. Ivan Ho (0.77%)

Financial Information

Based on the unaudited consolidated financial statements of KLR Holdings for the two years ended 31 December 2011, its net profits before and after taxation and extraordinary items for the financial year ended 31 December 2010 were approximately US$300,000 and approximately US$280,000 respectively and for the financial year ended 31 December 2011 were approximately US$1,035,000 and approximately US$724,000 respectively.

The unaudited net asset value and the unaudited total asset value of KLR Holdings as at 31 December 2011 amounted to approximately US$9,441,000 and approximately US$13,801,000 respectively.

Based on the unaudited consolidated financial statements of KLR Group for the year ended 31 December 2011, its net profits before and after taxation and extraordinary items for the financial year ended 31 December 2011 were approximately US$1,035,000 and approximately US$724,000 respectively.

Based on the audited consolidated financial statements of KLR Group for the year ended 31 December 2010, its net loss before and after taxation and extraordinary items for the financial year ended 31 December 2010 were approximately US$3,242,000 and approximately US$3,258,000 respectively.

The unaudited net asset value and the unaudited total asset value of KLR Group as at 31 December 2011 amounted to approximately US$8,637,000 and approximately US$12,997,000 respectively.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

As disclosed in the announcement dated 16 September 2010 of the Company, the Group had indirectly acquired approximately 15.86% effective interest in KLR Hong Kong through its acquisition of 29.36% interest in KLR Holdings.

Since the KLR Group undertakes fund management, real estate investment and asset management business in the PRC, the Directors believe that further increasing its interest in KLR Hong Kong will enable the Company to further increase its involvement in the real estate investment and fund management and asset management business in the PRC.

As disclosed in the announcement of the Company dated 16 May 2012 and the circular of the Company dated 1 June 2012, the Company considered the prospect of real estate-related investment business is good, and accordingly intended to expand and strengthen its existing real estate-related businesses, including increasing its shareholding in KLR Holdings to the extent that KLR Holdings or KLR Hong Kong may, ultimately, become a subsidiary of the Company.

Following the completion of the Transactions, the Company will have approximately 41.07% direct interest in KLR Hong Kong. Pursuant to the Shareholders’ Deed, the Company is able to exercise control over the board of directors of KLR Hong Kong, which is responsible for making major decisions relating to the financing and operations of KLR Hong Kong. Accordingly, KLR Hong Kong will be accounted for as a subsidiary of the Company after signing of the Shareholders’ Deed.

So far as the Company is aware, the operation of the KLR Group’s business usually involves 3 stages. First, the KLR Group will identify opportunities and acquire assets at a right time with a right price. Then, the KLR Group will provide asset management by improving the asset value through the provision of consulting services. Finally, the KLR Group will dispose of the asset when the timing is right to maximize the return. The Company understands that the KLR Group derives income primarily from fund management fees, asset management fees, acquisition and disposition fees and performance fees which are linked to the asset being managed and the return when the asset is disposed of. Since its inception in 2004, the KLR Group has managed 14 real estate projects in Beijing, Shanghai, Hangzhou and Hong Kong respectively, of which 10 are office developments, 2 are retail developments and 2 are residential developments.

After the Company’s initial acquisition of the shareholding in KLR Holdings in 2010, KLR Holdings through its subsidiaries has successfully closed two RMB real estate funds in Tianjin and Suzhou. Also, as far as the Company is aware, the KLR Group is now managing two funds with a total capital of RMB650 million and plans to invest in around RMB1.2 billion worth of property. As KLR Group has already established a presence in the PRC, the Company believes that the Group will be able to benefit from the expertise and the experience of the management team and the professional operation team of the KLR Group in operating the businesses of real estate investment, fund management and asset management. Further, by becoming a shareholder of KLR Hong Kong, the Group gained access to the network and chance to co-invest with a real estate fund manager in the Kwun Tong Project. As KLR Hong Kong can complement the Company’s business well and the PRC market for RMB fund products is very large, the Directors consider that acquisition of further interest in KLR Hong Kong will enable the Company to be further involved in the real estate investment, fund management and asset management business in the PRC.

The Directors (in respect of the Restructuring Agreement and the Subscription Agreement, excluding the independent non-executive Directors who will express their opinion after considering the independent financial adviser’s opinion) consider that the terms of the Restructuring Agreement, the Subscription Agreement and the Shareholders’ Deed are fair and reasonable and that the entering into of the Restructuring Agreement, the Subscription Agreement and the Shareholders’ Deed is in the interests of the Company and the Shareholders as a whole.

GENERAL

The Company is principally engaged in real estate development, real estate related investment, fund management and asset management, and distribution of construction and/or decoration materials.

Good Grace is principally engaged in investment holding activities.

Borrison is principally engaged in investment holding activities.

SCIM is principally engaged in real estate investment management activities.

PAG is principally engaged in alternative investment activities.

LISTING RULES IMPLICATIONS

Since Borrison, a substantial shareholder of KLR Holdings, is an associate of Mr. Ivan Ho who is a director of Wit Legend Investments Limited, a subsidiary of the Company, the entering into the Restructuring Agreement constitutes a connected transaction of the Company pursuant to Rule14A.13(1) (b)(i) of the Listing Rules. Pursuant to Rules 14.22 and 14A.25 of the Listing Rules, the advance of the Talent Step Loan and the Additional Talent Step Loan, the KLR Holdings Restructuring, the KLR Hong Kong Restructuring and the KLR Hong Kong Subscription will be aggregated and treated as if they were one transaction. As one or more of the applicable percentage ratios in respect of the aggregate amount of the Talent Step Loan and the Additional Talent Step Loan and the consideration payable by Talent Step under the KLR Holdings Restructuring, the KLR Hong Kong Restructuring and the KLR Hong Kong Subscription exceed 5% but all the applicable percentage ratios are below 25%, the entering into of the Restructuring Agreement also constitutes, and the entering into of the Subscription Agreement constitutes, discloseable transactions for the Company. As the Company considers that the Subscription Agreement and the Restructuring Agreement are part of the Company’s plan to acquire further interests in KLR Hong Kong, thus the Subscription Agreement is related to the Restructuring Agreement. Accordingly, both the Restructuring Agreement and the Subscription Agreement are subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules as well as the Independent Shareholders’ approval requirement under Chapter 14A of the Listing Rules.

WRITTEN APPROVAL

So far as the Company is aware, none of the Shareholders is materially interested in the Restructuring Agreement, the Subscription Agreement and the transactions contemplated thereunder. As such, no Shareholder is required to abstain from voting if general meeting were to be convened to approve the Restructuring Agreement, the Subscription Agreement and the transactions contemplated thereunder. As at the date of this announcement, Mr. Chan (through Tiger Crown) and Mr. Li and Ms. Li (through Scenemay Holdings) are regarded as a group of controlling shareholders acting in concert to exercise their voting rights in the Company, pursuant to the provisions of the SFO, each of them is deemed to be interested in the 194,208,000 Shares beneficially or deemed to be owned by each other. Tiger Crown, Scenemay Holdings, Mr. Chan, Mr. Li and Ms. Li together are therefore interested in a total of approximately 40.46% of the issued share capital of the Company. Mr. Ng (an existing Director), Mr. Leung and Mr. Wong (who were previously Directors) are interested in 84,000,000 Shares, 34,272,000 Shares and 20,520,000 Shares respectively. None of Mr. Chan, Tiger Crown, Mr. Li, Ms. Li, Mr. Leung, Mr. Ng and Mr. Wong have any material interest in the Restructuring Agreement, the Subscription Agreement and the transactions contemplated thereunder other than through their interest in the Shares. The Company has obtained the Written Approval from Tiger Crown, Scenemay Holdings, Mr. Leung, Mr. Ng and Mr. Wong, being a closely allied group of the Shareholders who collectively hold an aggregate of 333,000,000 Shares (representing approximately 69.75% of the issued share capital of the Company) as at the date of this announcement. Accordingly, pursuant to Rules 14A.43 and 14A.53 of the Listing Rules, the Company has applied for, and the Stock Exchange has granted, a waiver from the requirement to hold a general meeting and the permission for the Independent Shareholders’ approval in respect of the Restructuring Agreement, the Subscription Agreement and the transactions contemplated thereunder be given in the form of the Written Approval.

DEFINITIONS

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

“Additional Talent Step	as such term is defined in the section headed “The Restructuring
Loan”	Agreement – Background” in this announcement
“Board”	the board of Directors
“Borrison”	Borrison (B.V.I.) Limited, a company incorporated in the British Virgin
	Islands
“Company”	Sundart International Holdings Limited, the shares of which are listed on
	the Stock Exchange (Stock Code: 2288)
“connected person(s)”	has the meaning ascribed thereto in the Listing Rules
“Directors”	the directors of the Company
“Good Grace”	Good Grace Investments Limited, a company incorporated in the British
	Virgin Islands
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	Hong Kong Special Administrative Region of the PRC
“Independent Board	an independent board committee of the Company comprising Mr. To King
Committee”	Yan, Adam, Mr. Wong Hoi Ki and Mr. Ho Kwok Wah, George, all being
	independent non-executive Directors
“Independent	Shareholders who are not prohibited from voting if general meeting were
Shareholders”	to be convened to approve the Transactions under the Listing Rules
“KLR Group”	KLR Hong Kong and its subsidiaries
“KLR Holdings”	Kailong REI Holdings Limited, a company incorporated in the
	British Virgin Islands, as more particularly described in the section
	headed “Information on KLR Holdings and KLR Hong Kong” in this
	announcement

“KLR Holdings the restructuring of the shareholding of KLR Holdings pursuant to the Restructuring” Restructuring Agreement, details of which are summarised in the section headed “The Restructuring Agreement – KLR Holdings Restructuring” in this announcement

“KLR Holdings as such term is defined in the section headed “The Restructuring Restructuring Agreement – Background” in this announcement Completion”
“KLR Holdings Share(s)” share(s) in the capital of KLR Holdings
“KLR Hong Kong” Kailong REI Project Investment Consulting (Hong Kong) Co., Limited, a company incorporated in Hong Kong, as more particularly described in the section headed “Information on KLR Holdings and KLR Hong Kong” in this announcement
“KLR Hong Kong as such term is defined in the section headed “The Restructuring Acquisition” Agreement – Background” in this announcement
“KLR Hong Kong the restructuring of the shareholding of KLR Hong Kong pursuant to the Restructuring” Restructuring Agreement, details of which are summarised in the section headed “The Restructuring Agreement – KLR Hong Kong Restructuring” in this announcement
“KLR Hong Kong share(s) in the capital of KLR Hong Kong Share(s)”
“KLR Hong Kong Talent Step and the Other KLR Hong Kong Shareholders Shareholders”
“KLR Hong Kong the subscription of KLR Hong Kong Shares by the Subscribers pursuant to Subscription” the terms and conditions of the Subscription Agreement, details of which are summarised in the section headed “The Subscription Agreement – Subscription of KLR Hong Kong Shares” in this announcement
“Kwun Tong Project” the redevelopment project of the property located at 135-137 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong owned by Vital Success Development Limited, a company owned by the Company as to 65%
“Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

“Mr. Chan”

Mr. Chan William, an executive Director, the Chairman, the Chief Executive Officer of the Company and a substantial Shareholder

“Mr. Ivan Ho” Mr. Ho Chun Tung Ivan, a director of Wit Legend Investments Limited, a subsidiary of the Company
“Mr. Leung” Mr. Leung Kai Ming, the Chief Operating Officer of the Company and executive Director who resigned from the Company with effect from 1 July 2012
“Mr. Li” Mr. Li Chu Kwan, Ms. Li’s brother “Mr. Ng” Mr. Ng Tak Kwan, an executive Director and a substantial Shareholder “Mr. Wong” Mr. Wong Kim Hung, Patrick, a non-executive Director who resigned from the Company with effect from 1 July 2012
“Ms. Li” Ms. Li Wing Yin, Mr. Li’s sister “Other KLR Hong Kong Good Grace, Borrison, Mr. Stephen Anthony Roth, SCIM, PAG, Mr. Shareholders” Cheng Hei Ming, Mr. Ivan Ho, Ms. Woo Wai Yu and Mr. Geng Ho
“Other Subscribers” Good Grace, Borrison, Mr. Cheng Hei Ming, Mr. Ivan Ho, Mr. Stephen Anthony Roth and PAG
“PAG” PAG Real Estate Limited, a company incorporated in the Cayman Islands “PRC” the People’s Republic of China, which for the purpose of this announcement excludes Hong Kong, Macau Special Administration Region and Taiwan
“Restructuring Agreement” the restructuring agreement dated 11 July 2012 entered into between Talent Step, Good Grace, Borrison and KLR Holdings, as more particular described in the section headed “The Restructuring Agreement” in this announcement
“RMB” Renminbi, the lawful currency of the PRC “Sale Borrison Loan” as such term is defined in the section headed “The Restructuring Agreement – KLR Holdings Restructuring” in this announcement

“Sale Good Grace Loan”	as such term is defined in the section headed “The Restructuring
	Agreement – KLR Holdings Restructuring” in this announcement
“Scenemay Holdings”	Scenemay Holdings Limited, an investment holding company incorporated
	in the British Virgin Islands with limited liability on 18 December 2007,
	whose entire issued share capital is owned by Mr. Li and Ms. Li in equal
	shares
“SCIM”	Secured Capital Investment Management Co., Ltd., a company
	incorporated in Japan
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong
	Kong), as amended, supplemented or otherwise modified from time to
	time
“Share(s)”	share(s) of HK$0.01 each in the Company
“Shareholder(s)”	holder(s) of Share(s)
“Shareholders’ Deed”	the shareholders’ deed dated 11 July 2012 entered into between the
	KLR Hong Kong Shareholders and KLR Hong Kong, as more particular
	described in the section headed “The Shareholders’ Deed” in this
	announcement
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subscribers”	Talent Step and the Other Subscribers
“Subscription Agreement”	the subscription agreement dated 11 July 2012 entered into between the
	Subscribers and KLR Hong Kong, as more particular described in the
	section headed “The Subscription Agreement” in this announcement
“Talent Step”	Talent Step Investments Limited, a company incorporated in the British
	Virgin Islands and a wholly owned subsidiary of the Company
“Talent Step Loan”	as such term is defined in the section headed “The Restructuring
	Agreement – Background” in this announcement
“Tiger Crown”	Tiger Crown Limited, an investment holding company incorporated in the
	British Virgin Islands with limited liability on 2 March 2004, the entire
	issued share capital of which is owned by Mr. Chan

“Transactions”

the KLR Holdings Restructuring, the KLR Hong Kong Restructuring and the KLR Hong Kong Subscription

“Written Approval”

the written approval of, inter alia, the Restructuring Agreement, the Subscription Agreement and the transactions contemplated thereunder by Tiger Crown, Scenemay Holdings, Mr. Leung, Mr. Ng and Mr. Wong, dated 11 July 2012

“US$”

United States dollars, the lawful currency of the United States of America

“%”

per cent

By order of the Board

Sundart International Holdings Limited CHAN William Chairman

Hong Kong, 11 July 2012

As at the date of this announcement, the Board comprises Mr. Chan William (Chairman and Chief Executive Officer), Mr. Ng Tak Kwan and Mr. Yip Chun Kwok (Chief Financial Officer) as Executive Directors, and Mr. To King Yan, Adam, Mr. Wong Hoi Ki and Mr. Ho Kwok Wah, George as Independent Non-executive Directors.

AI assistant

Rykadan Capital Limited — Capital/Financing Update 2012

50499_rns_2012-07-11_fa021814-a221-4241-9733-94620d0b1911.pdf

SUNDART INTERNATIONAL HOLDINGS LIMITED 承達國際控股有限公司

CONNECTED AND DISCLOSEABLE TRANSACTION

ACQUISITION OF FURTHER INTERESTS IN KAILONG REI PROJECT INVESTMENT CONSULTING (HONG KONG) CO., LIMITED

ACQUISITION OF FURTHER INTERESTS IN KLR HONG KONG

LISTING RULES IMPLICATIONS

WRITTEN APPROVAL

INTRODUCTION

Date

Parties

Background

KLR Holdings Restructuring

KLR Hong Kong Restructuring

Condition to completion of the Restructuring Agreement

Consideration

THE SUBSCRIPTION AGREEMENT

Date

Parties

Subscription of KLR Hong Kong Shares

Consideration

Completion

THE SHAREHOLDERS’ DEED

Date

Parties

Effectiveness

Board Representation

Finance for KLR Hong Kong

Dividend Policy

Further issue of KLR Hong Kong Shares

Pre-emption rights

Drag-along rights

INFORMATION ON KLR HOLDINGS AND KLR HONG KONG

General

Simplified corporate structure

(i) Immediately prior to the completion of the Transactions

(ii) Immediately after the completion of the Transactions

Financial Information

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

GENERAL

LISTING RULES IMPLICATIONS

WRITTEN APPROVAL

DEFINITIONS

Sundart International Holdings Limited CHAN William Chairman

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Rykadan Capital Limited Capital/Financing Update 2012